Waaree Energies Sees Heavy Put Option Activity Amid Prolonged Downtrend

Intense Put Option Trading Signals Bearish Sentiment

On 6 January 2026, Waaree Energies emerged as the most active stock in put options trading, with 5,366 contracts changing hands at the 2,700 strike price for the 27 January 2026 expiry. This surge in put option volume generated a turnover of approximately ₹1195.13 lakhs, underscoring heightened investor interest in downside protection or speculative bearish bets. The open interest at this strike stands at 835 contracts, indicating sustained positioning rather than transient trading.

The underlying stock closed at ₹2,649.70, trading below the 2,700 strike price, which suggests that these puts are currently in-the-money or close to it. This dynamic often reflects market participants’ anticipation of further downside or a desire to hedge existing long positions amid uncertainty.

Prolonged Price Weakness and Technical Downtrend

Waaree Energies has been under pressure for over a week, recording a consecutive nine-day losing streak that has eroded approximately 14.4% of its value. The stock’s intraday low on 6 January touched ₹2,646, marking a 2.52% decline on the day and underperforming its sector by 1.69%. This underperformance is particularly notable given the broader market’s relatively muted movement, with the Sensex down only 0.14% and the sector falling 0.64% on the same day.

Technically, the stock is trading below all major moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a strong bearish trend. Such a technical setup often attracts put buyers seeking to capitalise on further declines or protect portfolios from downside risk.

Rising Investor Participation Amid Declining Prices

Interestingly, despite the downtrend, investor participation has surged. Delivery volume on 5 January reached 10.24 lakh shares, a remarkable 262.83% increase compared to the five-day average delivery volume. This spike in delivery volume suggests that investors are actively trading or accumulating shares at lower levels, possibly anticipating a turnaround or using the stock for hedging strategies.

Liquidity remains robust, with the stock’s average traded value supporting trade sizes up to ₹7.6 crore based on 2% of the five-day average traded value. This liquidity facilitates active options and equity trading, enabling market participants to execute sizeable hedging or speculative positions efficiently.

Mojo Score Upgrade Reflects Positive Long-Term Outlook Despite Near-Term Pressure

Despite the current bearish momentum, Waaree Energies carries a favourable fundamental rating. The company’s Mojo Score stands at 71.0, categorising it as a Buy with an upgraded Mojo Grade from Hold as of 9 December 2025. This upgrade reflects improved financial metrics and quality assessments, signalling that the stock may offer value for investors with a longer-term horizon.

However, the Market Cap Grade remains modest at 2, consistent with its mid-cap status and the inherent volatility associated with this segment. Investors should weigh the short-term technical weakness against the fundamental strength when considering exposure.

Expiry Patterns and Strike Price Significance

The 27 January 2026 expiry is attracting the bulk of put option activity, with the 2,700 strike price serving as a key psychological and technical level. The concentration of open interest and volume at this strike suggests that market participants view it as a critical threshold for downside risk management.

Given the current underlying price near ₹2,650, the 2,700 strike puts are positioned to provide effective downside protection or speculative leverage if the stock continues to slide. This pattern is typical in scenarios where investors anticipate volatility or a potential correction in the near term.

Implications for Investors and Traders

For investors, the heavy put option activity signals caution. Those holding long positions in Waaree Energies may consider protective strategies such as buying puts or tightening stop-loss levels to mitigate further losses. Conversely, traders with a bearish outlook might view the elevated put volumes as confirmation of downside momentum and seek to capitalise on potential declines.

It is also important to monitor the stock’s reaction as the January expiry approaches. A sustained breach below the 2,700 level could trigger additional selling pressure, while a rebound above key moving averages might alleviate bearish sentiment and reduce put option demand.

Sector and Market Context

Waaree Energies operates within the Other Electrical Equipment sector, which has shown relative resilience compared to the stock’s performance. The sector’s 1-day return of -0.64% contrasts with Waaree’s sharper 2.41% decline, highlighting company-specific pressures. The broader market, represented by the Sensex, has remained largely stable with a marginal 0.14% dip, suggesting that the stock’s weakness is not purely driven by macroeconomic factors.

Investors should consider sector trends and peer performance when evaluating Waaree Energies’ outlook. The company’s mid-cap market capitalisation of ₹77,644 crore places it in a category where volatility can be more pronounced, necessitating careful risk management.

Conclusion: Navigating a Bearish Phase with Caution

Waaree Energies Ltd is currently navigating a challenging phase marked by a sustained downtrend and heavy put option activity. The concentration of put contracts at the 2,700 strike price for the January expiry reflects a cautious or bearish stance among market participants. While the stock’s fundamental upgrade to a Buy rating offers a positive long-term perspective, near-term technical weakness and increased investor hedging suggest that volatility may persist.

Market participants should closely monitor price action around key technical levels and expiry dynamics to gauge the stock’s directional bias. Protective strategies and disciplined risk management will be essential for investors exposed to Waaree Energies during this period of heightened uncertainty.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →